acct ch 2 and 3 video questions

Put the steps involved with accounting for business activities in order. Analyze the financial effects Name what's exchanged Picture the documented activity

1. Picture the documented activity 2. Name what's exchanged 3. Analyze the financial effects

During the year, assets increased by $20,000 and stockholders' equity increased by $15,000. What was the increase in liabilities?

5,000

During May, Aldine Company advertised its products and received a bill, dated May 31, for $2,000 to be paid during the following month. Which of the following describes how Aldine will account for the receipt of the bill for advertising services?

Debit Advertising Expense for $2,000.

Matisse Co. pays $12,000 for rent of office space that will cover the next six months. Which of the following describes how Matisse will account for the payment for rent?

Debit Prepaid Rent for $12,000.

Which of the following is not an example of an operating activity?

Purchasing a long-term asset

Obtaining a loan would be an example of a(n):

financing activity

Which of the following is an example of an investing activity of a business? Issuing common stock Obtaining a loan Receiving an owner's investment of cash Purchasing office equipment

purchasing office equipment

Which of the following is increased with a credit? Net Income Sales Revenue Rent Expense Salaries and Wages Expense

sales revenue

Which of the following statements about revenues are true? -Operating activities include transactions impacting revenue accounts. -Revenues are the amounts a business charges its customers for services it provides or goods it sells to them. -Revenue is reported when the company is paid by the customer. -Revenue is reported when the company fulfills its promise to transfer control of a good or service to a customer.

-Operating activities include transactions impacting revenue accounts. -Revenues are the amounts a business charges its customers for services it provides or goods it sells to them. -Revenue is reported when the company fulfills its promise to transfer control of a good or service to a customer.

Buffy Inc., issued shares of common stock to investors in exchange for cash contributions. Which of the following statements is true with regards to this transaction?

Assets and stockholders' equity increased

Buffy Inc purchases and receives equipment totaling $8,000 in exchange for $8,000 cash. Which of the following statements is true with regards to this transaction?

Assets, liabilities, and stockholders' equity were not affected

Which of the following are reported on the balance sheet? Assets Dividends Expenses Liabilities Revenues Stockholders' equity

Assets, liabilities, stockholders equity

Berry Dive Shop receives a total of $500 today from its customer for scuba diving lessons. The lessons begin in the next fiscal year. Which of the following describes how the company will account for this transaction?

Credit Deferred Revenue for $500

Neeta Landscaping Company provides lawn care services to a customer and immediately receives $45. Which of the following describes how the company will account for this transaction?

Credit Service Revenue for $45

Brown Company prepared a tax return for a client and sent that client a bill for $750. Which of the following describes how Brown Company will account for the fee relating to this work?

Credit Service Revenue for $750

On June 30, Manning Company wrote checks to employees, totaling $1,500 for wages related to hours worked in June to provide services to its customers. Which of the following describes how Matisse will account for the payment to employees?

Debit Salaries and Wages Expense for $1,500

Which of the following appear at the end of the income statement?

net income

Buffy Inc., borrowed $50,000 from a bank, depositing those funds in its bank account and signing a formal agreement to repay the loan in two years. Which of the following statements is true with regards to this transaction?

Assets and liabilities increased.

Which of the following is (are) increased with a debit? Asset accounts Liability accounts The Common Stock account The Retained Earnings account

asset accounts